Carlos Domenech Zornoza Vindicated After a Nine Year Legal Battle

WASHINGTON , April 3, 2025 /PRNewswire/ -- Hinckley Allen secured a historic victory with a $34.5 million recovery in favor of its client, Carlos Domenech Zornoza (Mr. Domenech), marking the culmination of a nine-year legal battle. This is the largest documented recovery for a Sarbanes-Oxley whistleblower retaliation claim since the statute was enacted in 2005 following the Enron scandal. 

Mr. Domenech, the former President and CEO of Terraform Global, Inc. (Global) and Terraform Power, Inc. (TERP), and Executive Vice President of SunEdison, Inc. (SunEdison) in May 2016 filed a whistleblower retaliation lawsuit under the Sarbanes-Oxley Act (SOX) after TERP, Global, and SunEdison terminated him on November 20, 2015. Weeks before his termination, Mr. Domenech began informing the SunEdison Board of Directors that the then CEO and CFO of SunEdison were misrepresenting to the investing public the true liquidity and financial condition of SunEdison, the parent and sponsor of Global and TERP. Rather than listen to Mr. Domenech's disclosures or heed Mr. Domenech's advice about how to turn around SunEdison's financial condition, TERP, Global, and SunEdison abruptly terminated Mr. Domenech as the TERP and Global CEO and President to silence Mr. Domenech, and removed him as Executive Vice President of SunEdison. Six months after he was terminated, SunEdison filed for bankruptcy. 

On May 10, 2016, Mr. Domenech filed a whistleblower retaliation complaint under the Sarbanes-Oxley Act with the Department of Labor, challenging his wrongful termination. On August 16, 2018, in the U.S. District Court for the District of Maryland, Mr. Domenech filed a SOX complaint against TERP, Global, and certain individual officers and directors of TERP, Global, and SunEdison (Case Number: 8:18-cv-02523-(PX).

After nine years of litigation and a two-week bench trial on liability before the Honorable Paula Xinis, the Court found that TERP and Global violated the Sarbanes-Oxley Act when they unlawfully terminated Mr. Domenech on November 20, 2015, in retaliation for his whistleblowing activities. After the finding of liability and on the eve of the damages phase of the trial, TERP and Global agreed to pay Mr. Domenech $34.5 million to end the lawsuit. 

"It was a privilege to represent Carlos in this historic case. He was unlawfully retaliated against for speaking out, standing up, and trying to protect the shareholders of TERP, Global, and SunEdison," said James L. Tuxbury, Partner at Hinckley Allen. "We are extremely pleased to deliver this well-deserved outcome to Carlos. This was a complex lawsuit involving novel issues in employment law, securities fraud, and accounting. The Hinckley Allen team was focused from day one on preparing this case for trial to achieve the best outcome for Carlos. When the trial finally came nine years later, we were prepared and able to deliver a total victory for our client."

"The Court's finding of liability in favor of Mr. Domenech under SOX represents a landmark moment in whistleblower protection law, underscores the importance of protecting employees who raise concerns about corporate misconduct, and reminds the boards of publicly traded companies that SOX is alive and well," said Christopher V. Fenlon, Partner at Hinckley Allen. "It sends a clear message that whistleblowers will not be silenced or retaliated against for speaking out against fraudulent or unethical practices. It is essential for the integrity of the markets that those who identify and report wrongdoing are safeguarded, not punished."

"Core values and individual character shape a company's culture. Integrity is the foundation, ensuring trust, transparency, and lasting success," said Carlos Domenech Zornoza.  "Jim Tuxbury and the team at Hinckley Allen were critical to my success. Hinckley Allen understood the critical facts and complexities of my case, they were relentless advocating on my behalf, and they marshalled the evidence at trial to secure my victory." 

This complex and multifaceted litigation involved both corporate accountability and individual protections for company insiders who report conduct that violates securities laws, rules and regulations. During the nine-year litigation, a number of global law firms representing the defendants and their allies went up against Hinckley Allen's litigation team. The timeline of key developments includes:

• May 10, 2016: Mr. Domenech filed his SOX complaint with the Department of Labor's Occupational Safety and Health Administration (OSHA).
• August 16, 2018: Having received no decision from OSHA, Mr. Domenech withdrew his Complaint and elected to proceed in federal court. Mr. Domenech filed a federal complaint alleging his SOX claim in United States District Court in the District of Maryland.
• December 6, 2018: The case was transferred to the Southern District of New York and consolidated for pre-trial proceedings with other cases related to the SunEdison Bankruptcy in the Multi-District Litigation (MDL) No. 2742, before the Hon. P. Kevin Castel. 
• December 9, 2019: The Court dismissed certain board members from the case, but denied the other defendants' motions to dismiss, allowing Mr. Domenech's claims to proceed against TERP, Global, and the CEO and CFO of SunEdison.
• April 7, 2023: The Court granted in part and denied in part motions for summary judgment, allowing Mr. Domenech's SOX claim against Global and TERP to proceed to trial.
• May 2, 2023: The United States Judicial Panel on Multidistrict Litigation remanded the case to the District of Maryland for trial.
• July 22 – August 1, 2024: The Hon. Paula Xinis of the District of Maryland conducted a two-week bench trial on the issue of whether Global and TERP were liable under SOX.  This was part one of what was set to be a two-part trial, with a damages trial scheduled for after the Court ruled on liability.
• January 7, 2025: Judge Xinis informed the parties during a court conference that the court is finding SOX liability in favor of Mr. Domenech.
• January 20, 2025: The parties reached an agreement in principle to settle the case on the eve of the damages trial, which was scheduled to commence the next day.

March 20, 2025: The parties executed a Settlement Agreement that includes a $34.5 million payment to Mr. Domenech and a public acknowledgment in the form of a press release.

The Hinckley Allen team was led by James L. Tuxbury, Christopher V. Fenlon, Michael J. Connolly, and Janelle A. Pelli of our Litigation and Labor & Employment groups, as well as several other lawyers, paralegals, and professional support staff.

About Hinckley Allen
Hinckley Allen is a business law firm that delivers exceptional results for its clients. Recognized by the American Lawyer as one of the nation's top law firms, Hinckley Allen's professionals represent leading regional, national, and global businesses on their most important business and legal matters. The firm's 170 lawyers work in offices located in Connecticut, Florida, Illinois, Massachusetts, New Hampshire, New York and Rhode Island. Hinckley Allen has been a vital force in law, business, government, and our communities since 1906. Learn more at hinckleyallen.com

Media Contact:
Gina Carriuolo, Hinckley Allen
617.378.4129 | gcarriuolo@hinckleyallen.com

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